you are saving money to buy a car. if you save $290 per month starting one month from now at an interest rate of 12%, how much will you able to spend on the car after saving for 5 years

Q: Suppose you finance a $10000 car over 8 years at car an interest rate of 14% per month. How much is…

A: Loan amount (PV) = $ 10000 Period = 8 Years Number of monthly payments (n) = 8*12 = 96 Interest rate…

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: Time value of money :— It means that value of money in present days has more as compared from same…

Q: Suppose you wish to start up your coffee shop.  You need to borrow $50,000 today.  You intend to pay…

A: Using PMT function of the excel to calculate monthly withdrawals

Q: You have already saved $6975 to buy a used car. You invest this money in a certificate of deposit…

A: Future Value refers to the value of the current asset at any specified future date for a given…

Q: You are looking to purchase a new car, and you expect to have annual maintenance costs to keep it…

A: Please see the next step for the solution

Q: How much will you have after 5 years? How much will you have after 5 years if you make the deposits…

A: Each year Deposit RM 2500 Interest Rate 4%

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: We need to use present value formula below to calculate amount required today in account.PV…

Q: You would like to purchase a new car in the side that you can afford monthly payments of $400 how…

A: The monthly payment is :The aim is to find the initial loan amount

Q: You can afford monthly payments of $400 per month. If you are financing a car at 10% APR and 60…

A: A car loan is a type of personal loan specifically designed for purchasing an automobile. Borrowers…

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: The future value (FV) of an annuity represents the total value of all cash flows from an annuity at…

Q: You plan to fina

A: future annuity – suppose an equal sum of money is invested in the bank on a recurring basis what…

Q: After graduating from college and securing your first job in your field of study, you need to…

A: Car price = $92,500Down payment = 2%The amount of loan is

Q: How long will it take you to buy a house that cost $200,000 if you have $50,000 in your account with…

A: It can be calculated using =NPER(rate,pmt,pv,[fv],[type]) Rate The interest rate for the loan. Nper…

Q: You want to buy a home in 5 years, and you think at that time you will be able to afford to buy a…

A: Monthly payment refers to an amount that is being paid at every month for the repayment of the…

Q: You want to save $20,000 to purchase a new car. You place $700 a month in a special savings account…

A: Calculation of number of periods: Answer: It will take 26.77 years to save an amount of $20,000

Q: You want to buy a $23,000 car. You can make a 10% down payment, and will finance the balance with a…

A: A loan refers to a contract between a borrower and a lender where a sum is exchanged on the promise…

Q: You plan to graduate in 4 years, and then travel to Italy for 3 weeks. The trip will cost $ 1,600.…

A: PV function in Excel returns the present value of an annuity.Syntax: =PV(rate, nper, pmt, fv)

Q: You need to save $200 000 by making monthly deposit of 100 for 6 years. How much interest must you…

A: Rate of interest refers to the percentage of return on the investment.

Q: ou take out a 6-year amortized loan to buy a new car. After making monthly payments of $242.30 for 4…

A: Amortized loan A loan with periodic payments that are applicable to the principal as well as on the…

Q: You want to buy a car for $25000 that has to be paid in 5 years. If the car dealer agrees to finance…

A: Working note:

Q: You need $30000 in cash to buy a car 15 years from today. You expect to earn 14 percent, compounded…

A: Future value is important to both investors and financial planners because it helps them to predict…

Q: You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay…

A: An Annuity Due is a stream of regular periodic payments made at a beginning of period for a…

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: The FV of an investment refers to the combined worth of the cash flows of the investment at a…

Q: You are planning to buy a house in 8 years. You would like to be able to make a down payment of…

A: Continuous compounding is often used in financial calculations because it simplifies mathematics and…

Q: You would like to save for a car. You would like to have $20,000 saved in 5 years. You decide to…

A: Recurring deposit is an annuity where same amount is deposited with an institution over cardinal…

Q: A car is priced 35000. The price is expected to rise by 3% a year.If your local bank offers 10%…

A: Solution:- When an amount is invested in a bank, it earns interest on it. With rise of inflation,…

Q: You want to buy a new car and have saved a down payment of $2000. The car that you want costs…

A: To solve the question, we first need to determine the amount for which the monthly payments has to…

Q: ave selected a new car to purchase for $19,500. If the car can be financed over a period of 4 years…

A: The given problem can be solved using PMT function in excel. PMT function computes instalment amount…

Q: You invest $5 daily into an account earning 6% compounded daily. How much will be in the account…

A: FV stands for future value which is the concept that allocates the value to the asset grounded on…

Q: You are borrowing money to buy a car. If you can make payments of $280 per month starting one month…

A: Present value is the current value of future cash flows. It can be calculated by discounting the…

Q: You just got your first engineering job. How much money would you have to save per vest the money…

A: Since the same amount is needed to be saved per month, it is an annuity. The future value of annuity…

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: Future value refers to the accumulated amount in the fund account by compounding of the amount at…

Q: What rate will meet his desire to buy the car?

A: Information Provided: Term = 10 years Monthly Deposit = 6000 Future value = 756,000

Q: Say, you want to buy your dream car, costing $40k, in 5 years. You are saving up for that by making…

A: Car cost = Future Value Required = 40,000 Time Period = 60 months Monthly Deposit = ? First Month…

Q: You want to buy a $15,000.00 car. You can make a 10% down payment, and will finance the balance with…

A: The Equal Montly installment is calculated with the help of following formula  EMI = P × r(1 + r)n…

Q: If you buy a bicycle for $1000 and sell it for $1276.3 after 5 years.  What is your rate of return?…

A: Future Value = Present value * (1+r)^n Where, r = rate of interest  n = no. of years

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: Future Value :— It is the value of present cash flow in future.    Future Value = Present Value ×…

Q: Suppose you want to borrow $20,000 for a new car. You can borrow 8% per year, compounded 8 monthly…

A: A monthly payment on a loan is a fixed amount of money that a borrower is required to repay to the…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.